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SMG FE 101 Lecture : FE101 Lecture 1 Notes

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hahn
20 Mar 2022
School
Boston University
Department
Finance
Course
SMG FE 101
Professor
Cornelia Newell

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Document Summary

The financial manager makes decisions on behalf of the firm"s investors. If the value of the benefits exceeds the value of the costs, the value of the firm will increase. Note that real-world opportunities are often difficult to quantify and involve using skills from other management. Suppose a jewelry manufacturer has the opportunity to trade 200 ounces of silver and receive 10 ounces of gold today. To compare the costs and benefits, we first need to convert them to a common unit. A competitive market in which a good can be bought and sold at the same price. In a competitive market, the price determines the value of the good. You have just won a radio contest and are disappointed to learn that the prize is 4 tickets to the def leppard reunion tour (face value ). Not being a fan, you have the other choice of getting tickets to a sold out show ( each).

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Related Questions

Analyze the cost benefit function of venture capital financing vs capital market financing. make an opportunity cost benefit analysis in discounting vs outright payment.

1. As an oil refiner, you are able to produce $77 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $78 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude. Another oil refiner is offering to trade you 10150 bbl of Alaska North Slope (ANS) crude oil for 10000 bbl of West Texas Intermediate (WTI) crude oil. Assuming you currently have 10000 bbl of WTI crude, the added benefit (cost) to you if you take the trade is closest to ________.

2. You own 1000 shares of Newstar Financial stock, currently trading for 57 per share. You are offered a deal where you can exchange these stocks for 900 shares of Amback Financial Group stock, currently trading at $63 per share. What is the value of this trade, if you choose to make it?

3. What is a competitive market?

A) a market in which goods have a different ask price and bid price

B) a market in which a good can be bought and sold at the same price

C) a market in which a good is sold at a lower price than that for which it can be bought

D) a market in which a good is bought for a lower price than that for which it can be sold

How would you set up a cost-benefit analysis of a program to reduce air pollution in a city? Indicate the items you would include as costs and benefits, and discuss the problems encountered in measuring these benefits and costs. Write a report proposing your program to the Mayor and Council. Include in your proposal the Cost-Benefit Analysis Tableau for your proposal.